Bullish Set-Up In The Nifty 50
Peter Brandt | Jul 19, 2015 04:38AM ET
The Nifty's advance in March 2014 completed a 6-year ascending triangle on the monthly graph and established a target in the Nifty of 10,000, as shown below.
The daily graph has developed an extremely rare chart construction — an interlocking H&S. Several observations are worthy of note on this chart:
First, notice the completion in mid June of a clearly defined H&S top pattern. Factor commented at the time that this breakout was more likely to become a bear trap whereby weak longs were washed out of their positions. This is exactly what happened.
Second, the daily graph has formed an inverted 3-month H&S pattern with an up-slanted neckline. The left shoulder of this smaller H&S served as the right shoulder of the larger H&S top pattern — thus, an interlocking H&S.
If the above analysis is correct, the July 9 low at 8310 should hold. The market appears to be back on track toward its long-term target.
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